8 ms·

I've said it before, I'll say it again: Crypto currency is about tearing down the old rules and institutions of banking and finding out one failure at a time wh

by Pxtl 5y ago

I've said it before, I'll say it again: Crypto currency is about tearing down the old rules and institutions of banking and finding out one failure at a time why each rule and institution exists.

dumbfoundded 5y ago
In a larger sense, that's a general trend of "innovation". Social media is just advertising that avoided regulation by being on the internet. Now it's rediscovering why public broadcasting laws are necessary. The whole gig economy is rediscovering why workers' rights & protections were invented. AirBnB is rediscovering why zoning and safety standards were created for hotels. Nothing has really changed at all. Innovation seems more about inventing a way to do an old thing that feels new enough to avoid legal scrutiny until a company gets large enough and the public angry enough that laws create regulatory capture.
- jaytaylor 5y ago
  > Regulatory capture is an economic theory that regulatory agencies may come to be dominated by the interests they regulate and not by the public interest. The result is that the agency instead acts in ways that benefit the interests it is supposed to be regulating. I'm not sure if I am reading your comment correctly. Regulatory capture doesn't sound like a desirable thing, and wouldn't do the desired regulating. What did/do you believe the definition is?
  - jjkaczor 5y ago
    >Regulatory capture doesn't sound like a desirable thing It's not a desirable thing for the public - plenty desirable for industry... It worked out pretty well with Ajit Patel and the FCC... Or the CRTC and it's board members and adhoc meetings in bars/pubs with the telecom industry.
    - arcticbull 5y ago
      Ajit Pai right? Mr. Reese's Pieces Cup.
      - jjkaczor 5y ago
        Sigh - my GoogleFu failed me.
    - loldk 5y ago
      And Pharmaceutical Companies and the FDA, and chemical companies like Monsanto and the USDA & FDA. Just to sprinkle a few more examples.
  - dumbfoundded 5y ago
    I'm sorry I wrote my comment quickly but I'll expand and I do think I used "regulatory capture" somewhat correctly. Once an innovative industry gets big enough, the public will want it regulated and the largest companies will regulate it in such a way to stifle competition. It's certainly not a good thing. The stock market, oil/gas, telecommunications are all examples of industries that started as innovative with no regulation. Once established, they were regulated. The stock market got consumer protections. Oil/gas faced environment & safety regulations. Telecommunications face many regulations around zoning and providing rural and not always profitable access. In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. The same will happen with digital advertising and the gig economy. The public is already getting tired of the wild west and calling for regulation. This regulation will be twisted and controlled by the companies it impacts to secure their future.
    - nl 5y ago
      > It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. You have misunderstood regulatory capture. Regulatory capture occurs when the regulator puts the interests of those in the industry ahead of consumers. > In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. This isn't regulatory capture. Regulatory capture is things like making laws that it is only possible for incumbents to be licensed to do specific jobs.
      - dumbfoundded 5y ago
        I don't think the world is that simple. Corporations will usually use some consumer benefit that gives them an even greater benefit. I think I'm literally saying the same thing as you but with some nuance added. Companies don't just own the regulators and force them to do whatever they want. Companies justify extremely self interested regulations through the guise of some consumer benefit. For industries emerging from the innovation stage to the regulatory capture state, usually the first regulations increase the startup cost to some extremely high level that only the incumbents can support. Only in the advanced stages to governments grant monopolies to specific companies.
- fsckboy 5y ago
  you're using regulatory capture wrong: first comes regulation (pro consumer, for example), then comes regulatory capture (pro industry)
- Dracophoenix 5y ago
  Is it rediscovering them or pointing out the weaknesses of such laws? And if I might say so, for a tech forum, there seems to be a remarkable number of luddites who sit mighty high on their horses as they sing the praises of Chesterton's fence while simultaneously baying over the stagnation of housing, transportation, and their flavor-of-the-week, dead-on-arrival revolution, etc. Should we never have used GPS because a good map won't lead you into a desert? Should we stop using phones because a one-to-one conversation may end up as dead an art as Latin is a language? Not everything that was done before was done for the right reason. Not now or even then. They were done mainly because there was no other given choice or someone on a high chair said so and signed his name on a piece of paper declaring it as law. I'd say it's beneficial that those regulations have been circumvented even if I don't necessarily cheer on the particular actors who do the circumventing or what they do afterwards. Innovation is about finding novel ways to get from A to B as speedily, efficiently, and effectively as possible. And if regulations create a roadblock to it, all the more reason to invent around them. After all, there wouldn't a modern desktop if it wasn't for Compaq engineers reverse-engineering and reimplementing IBM's BIOS.
  - dumbfoundded 5y ago
    You make a great point and I think it's hard to generalize. Nukes have made large scale devastating wars irrelevant but could potentially end civilization or be used to terrorists to evaporate a city. The single largest improvement in quality of life for humanity came from burning fossil fuels but now we face imminent and dire consequences from climate change and have already made humanity one of a handful of mass extinctions on Earth. Radio broadcasts brought music and news into every household but also brought propaganda and contributed significantly to the rise of Nazism (1). Our similar advances in communication technology seem to strike a similar chord. Even GPS, the internet, encryption, and TOR were only developed as military technologies later coopted for civilian use. The theme appears to be that innovation brings many benefits and great risks. I would advise appreciation of nuance and thoughtfulness. As we become a Kardashev Type I civilization, we could carefully consider the way we organize our society and the existential risks we create for ourselves. For the first time in our history, we have the ability to pretty much completely annihilate ourselves and we're only creating more ways to do it. Maybe some caution is due. (1) https://daily.jstor.org/an-affordable-radio-brought-nazi-propaganda-home/#:~:text=In%20the%201930s%2C%20Nazi%20Propaganda,1933%20example%20of%20the%20Volksempf%C3%A4nger https://daily.jstor.org/an-affordable-radio-brought-nazi-pro....
- sellyme 5y ago
  > Social media is just advertising that avoided regulation by being on the internet. Now it's rediscovering why public broadcasting laws are necessary. Weirdly, online advertising is in some cases more restricted than traditional broadcasting. I've never seen a movie pause half-way through so someone can go "By the way, Microsoft paid us $5,000,000 to feature this extremely close-up shot of a Surface with the branding visible", but that's a legal requirement for YouTube videos containing sponsored content.
  - dumbfoundded 5y ago
    Yeah, that's part of the new regulations / guidelines by the FTC. If FB/Youtube/IG/TikTok have to enforce that, it would be probably be a complicated and difficult system to build. This would increase the barriers to start a social network. This is part of the transition from innovation to regulatory capture. 10 years ago there weren't really any limits or regulatory clarifications and I expect to only see more.
- danjac 5y ago
  It's not really about "innovation", it's about fooling investors, customers and employees/gig workers for as long as possible until economic, technological or legal reality catches up with you. See: WeWork, Uber, etc.
DJBunnies 5y ago
Not all crypto currencies are the same. Ethereum has had lots of these hacks, due to bugs in the smart contracts provided. You don't see these types of (protocol level) hacks in bitcoin, litecoin, or monero.
- dumbfoundded 5y ago
  Ethereum actually offers interesting features and possibilities as well as being a currency. Bitcoin, litecoin and especially monero are only useful when you want to spend money in a way a government doesn't want you too.
  - deleted 5y ago
    [deleted]
  - DJBunnies 5y ago
    Solutions for problems that don't exist. While opening up a huge attack surface. Blockchains don't need to be turing complete, for reasons like the contents of this article.
- twox2 5y ago
  These aren't protocol level hacks. These hacks exploit logic flaws in the smart contracts.
  - DJBunnies 5y ago
    Which are enforced by the protocol.
    - zionic 5y ago
      If an AWS hosted site gets SQL injected who is to blame?
      - MonkeyClub 5y ago
        Russia? /s
hevalon 5y ago
I will only partially agree with you; mainly because indeed, that's what they're pitching crypto as - To be your own bank. But practically, most blockchains are replacing the inter-banking networks (like SWIFT) rather than the banks themselves, as you still need centralised entrypoints. To save some comments; Yes, they do have the potentials to create their own closed-circle economic ecosystems, but for the retail banking services to work (eg overdrafts, mortgages etc) you will end-up with centralised players as these kind of services need to be backed by wealth (it's not a tech-issue).
- xur17 5y ago
  2 of the biggest benefits I see are: - leveling the playing field with an open interface that anyone can build on top of - allowing true ownership of assets
  - sbeller 5y ago
    > - allowing true ownership of assets What is ownership and how is it true? This is philosophically on the deep end, as the evil powers can seize your wallet just as easily and you may have no (legal) recourse, https://xkcd.com/538/ https://xkcd.com/538/ Seriously if I own a traditional asset within the current legal system (e.g. stocks, bonds, real estate), "the system" can help me protect and enforce my ownership rights, if you're in good social standing. In crypto "the system" cannot help you as much. However if you are in bad social standing, the system can seize the wallet or the stocks easily.
- nicholasbraker 5y ago
  Actually they are still blockchains in their own ecosystem. The only one who bridges blockchains between old and new ledgers is Quant including replacing SWIFT.
cfield 5y ago
Indeed. The uncertainty inherent in the universe we understand today and in all human endeavors is difficult to contend with in code. In the main, contracts serve to reduce uncertainty and to attempt to manage uncertainty that can't or shouldn't be reduced. Of necessity, contract law has developed a myriad of principles and rules in service of this aim. However, these principles and rules are themselves predominantly characterized by uncertainty. See, for example, the implied covenant of good faith and fair dealing.[0] Humility — and a corollary respect for our ancestors — is a defining characteristic of my own study of the law. --- [0] https://en.wikipedia.org/wiki/Good_faith_(law) https://en.wikipedia.org/wiki/Good_faith_(law)
71a54xd 5y ago
More calls for crypto regulation in 3..2..1..
DennisP 5y ago
As if thefts never occur in legacy banking. Here's a SWIFT network hack that successfully stole $81 million from the central bank of Bangladesh: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery At a lower level, mortgage wire fraud is a serious problem in real estate closings, and once it happens it's very difficult to get your money back: https://www.rocketmortgage.com/learn/mortgage-wire-fraud https://www.rocketmortgage.com/learn/mortgage-wire-fraud
- tyingq 5y ago
  81 million out of ~950 million attempted, then 18 of the 81 later recovered. So it was originally about the same scale as this one.
arcticbull 5y ago
Crypto is what the real markets would look like if the SEC gave everyone the decade off, and it's the worst. There's a reason we have an SEC. 1929 all over again. Regulation S needs to be extended to all crypto trading. [1] [1] https://www.dorsey.com/~/media/files/newsresources/publications/2005/03/summary-of-sec-regulation-s/files/tbls21publicationspdfupload1411007summaryofsecre__/fileattachment/summary_of_sec_regulation_s.pdf https://www.dorsey.com/~/media/files/newsresources/publicati...
- DSingularity 5y ago
  Why this one in particular?
  - arcticbull 5y ago
    Doesn't permit Americans from trading securities overseas outside the watchful gaze of the SEC. IMO that's where the bulk of the insanity and manipulation happens.
  - arcticbull 5y ago
    I misspoke a little bit, but to clarify: the regulatory regime in the US requires that US persons only trade US equities at SEC regulated brokerages. As such, broadly speaking, Americans cannot open brokerage accounts in foreign countries. Regulation S offers an exemption to this blanket rule, saying they're trading exclusively offshore in some circumstances that's ok too. What I'm advocating is that all crypto trading by US persons be at SEC/CFTC/etc regulated exchanges. Offshore appears to be where the chaos happens, see: Binance.
    - jcrites 5y ago
      Not all cryptocurrencies are securities. They don't all fall within the purview of the SEC. Bitcoin is not is a security. Neither is Etherium. I'm not an expert on this area but I don't believe the SEC has the power to regulate them, unless they stray into naughty territory. New Initial Coin Offerings are something that it can evaluate and deem a security, requiring proper SEC listing as a security; but the existing established digital currencies are not securities and do not require trading through brokers just like trading cash (or exchanging one currency for another) does not require brokers. The SEC hasn't declared them currencies but neither are they securities. They are assets that you can trade with anyone. That's my best understanding of the SEC's current stance. Future ICOs could also being avoid classified as securities if the avoided matching the rules that the SEC uses to evaluate whether an offering is a security. There's a checklist of criteria, including whether the asset is being advertised as something that people can buy and expect to make money on. Ethereum launched as a network where you could perform functional operations more complex than Bitcoin, and was a bit before the SEC got its evaluation rules together (from what I understand), and so may have slipped under the radar; but it certainly wasn't a pump-and-dump scheme like many other ICOs have been.
tyingq 5y ago
Somewhat similar to how an Uber now costs what a cab did since they are no longer subsidizing the ride cost. And also now seems to have similarly low margins. But, it did greatly improve the quality and availability of the service. Maybe crypto helps push banks the same direction.
breput 5y ago
The amount of regulation that any particular industry has is institutional knowledge about all of the failures and shady practices that have previously occurred and would otherwise be forgotten: * Banks * Finance * Insurance * Building and fire codes * Pharma * Travel (airlines, trucks, and cars) * Energy
tac0_ 5y ago
This is a very closed minded view. You're basically saying that every inefficiency in the current financial system is justified and we shouldn't try and change them?
- dwb 5y ago
  Of course we should, but the solution is primarily politics, not technology.
renewiltord 5y ago
Meanwhile, Citibank goes around showing you why these rules can still leave you a sucker.
1vuio0pswjnm7 5y ago
It is amazing to me how dilgently people who criticise cryptocurrency are attacked when they comment about it online. I think cryptocurrency is a story of how easily the work of idealistic software authors is co-opted to support the motives of people with more selfish intentions. One could argue its a microcosm of the problems with the internet and so-called "tech industry" as a whole.
robertwt7 5y ago
Not only tearing down, but it also introduce a new system as an exchange. That is innovation. There will be cons and challenges, but those will evolve crypto even further

by Pxtl 5y ago

I've said it before, I'll say it again: Crypto currency is about tearing down the old rules and institutions of banking and finding out one failure at a time why each rule and institution exists.

dumbfoundded 5y ago

In a larger sense, that's a general trend of "innovation". Social media is just advertising that avoided regulation by being on the internet. Now it's rediscovering why public broadcasting laws are necessary. The whole gig economy is rediscovering why workers' rights & protections were invented. AirBnB is rediscovering why zoning and safety standards were created for hotels. Nothing has really changed at all. Innovation seems more about inventing a way to do an old thing that feels new enough to avoid legal scrutiny until a company gets large enough and the public angry enough that laws create regulatory capture.

jaytaylor 5y ago
> Regulatory capture is an economic theory that regulatory agencies may come to be dominated by the interests they regulate and not by the public interest. The result is that the agency instead acts in ways that benefit the interests it is supposed to be regulating. I'm not sure if I am reading your comment correctly. Regulatory capture doesn't sound like a desirable thing, and wouldn't do the desired regulating. What did/do you believe the definition is?
- jjkaczor 5y ago
  >Regulatory capture doesn't sound like a desirable thing It's not a desirable thing for the public - plenty desirable for industry... It worked out pretty well with Ajit Patel and the FCC... Or the CRTC and it's board members and adhoc meetings in bars/pubs with the telecom industry.
  - arcticbull 5y ago
    Ajit Pai right? Mr. Reese's Pieces Cup.
    - jjkaczor 5y ago
      Sigh - my GoogleFu failed me.
  - loldk 5y ago
    And Pharmaceutical Companies and the FDA, and chemical companies like Monsanto and the USDA & FDA. Just to sprinkle a few more examples.
- dumbfoundded 5y ago
  I'm sorry I wrote my comment quickly but I'll expand and I do think I used "regulatory capture" somewhat correctly. Once an innovative industry gets big enough, the public will want it regulated and the largest companies will regulate it in such a way to stifle competition. It's certainly not a good thing. The stock market, oil/gas, telecommunications are all examples of industries that started as innovative with no regulation. Once established, they were regulated. The stock market got consumer protections. Oil/gas faced environment & safety regulations. Telecommunications face many regulations around zoning and providing rural and not always profitable access. In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. The same will happen with digital advertising and the gig economy. The public is already getting tired of the wild west and calling for regulation. This regulation will be twisted and controlled by the companies it impacts to secure their future.
  - nl 5y ago
    > It's a bit of a tradeoff. As consumers, we get some benefits and the company gets their existence & rent guaranteed indefinitely. You have misunderstood regulatory capture. Regulatory capture occurs when the regulator puts the interests of those in the industry ahead of consumers. > In return, this regulation raised the startup costs so significantly that only the pre-existing large companies could adapt and new entrants effectively ceased to exist. This isn't regulatory capture. Regulatory capture is things like making laws that it is only possible for incumbents to be licensed to do specific jobs.
    - dumbfoundded 5y ago
      I don't think the world is that simple. Corporations will usually use some consumer benefit that gives them an even greater benefit. I think I'm literally saying the same thing as you but with some nuance added. Companies don't just own the regulators and force them to do whatever they want. Companies justify extremely self interested regulations through the guise of some consumer benefit. For industries emerging from the innovation stage to the regulatory capture state, usually the first regulations increase the startup cost to some extremely high level that only the incumbents can support. Only in the advanced stages to governments grant monopolies to specific companies.
fsckboy 5y ago
you're using regulatory capture wrong: first comes regulation (pro consumer, for example), then comes regulatory capture (pro industry)
Dracophoenix 5y ago
Is it rediscovering them or pointing out the weaknesses of such laws? And if I might say so, for a tech forum, there seems to be a remarkable number of luddites who sit mighty high on their horses as they sing the praises of Chesterton's fence while simultaneously baying over the stagnation of housing, transportation, and their flavor-of-the-week, dead-on-arrival revolution, etc. Should we never have used GPS because a good map won't lead you into a desert? Should we stop using phones because a one-to-one conversation may end up as dead an art as Latin is a language? Not everything that was done before was done for the right reason. Not now or even then. They were done mainly because there was no other given choice or someone on a high chair said so and signed his name on a piece of paper declaring it as law. I'd say it's beneficial that those regulations have been circumvented even if I don't necessarily cheer on the particular actors who do the circumventing or what they do afterwards. Innovation is about finding novel ways to get from A to B as speedily, efficiently, and effectively as possible. And if regulations create a roadblock to it, all the more reason to invent around them. After all, there wouldn't a modern desktop if it wasn't for Compaq engineers reverse-engineering and reimplementing IBM's BIOS.
- dumbfoundded 5y ago
  You make a great point and I think it's hard to generalize. Nukes have made large scale devastating wars irrelevant but could potentially end civilization or be used to terrorists to evaporate a city. The single largest improvement in quality of life for humanity came from burning fossil fuels but now we face imminent and dire consequences from climate change and have already made humanity one of a handful of mass extinctions on Earth. Radio broadcasts brought music and news into every household but also brought propaganda and contributed significantly to the rise of Nazism (1). Our similar advances in communication technology seem to strike a similar chord. Even GPS, the internet, encryption, and TOR were only developed as military technologies later coopted for civilian use. The theme appears to be that innovation brings many benefits and great risks. I would advise appreciation of nuance and thoughtfulness. As we become a Kardashev Type I civilization, we could carefully consider the way we organize our society and the existential risks we create for ourselves. For the first time in our history, we have the ability to pretty much completely annihilate ourselves and we're only creating more ways to do it. Maybe some caution is due. (1) https://daily.jstor.org/an-affordable-radio-brought-nazi-propaganda-home/#:~:text=In%20the%201930s%2C%20Nazi%20Propaganda,1933%20example%20of%20the%20Volksempf%C3%A4nger https://daily.jstor.org/an-affordable-radio-brought-nazi-pro....
sellyme 5y ago
> Social media is just advertising that avoided regulation by being on the internet. Now it's rediscovering why public broadcasting laws are necessary. Weirdly, online advertising is in some cases more restricted than traditional broadcasting. I've never seen a movie pause half-way through so someone can go "By the way, Microsoft paid us $5,000,000 to feature this extremely close-up shot of a Surface with the branding visible", but that's a legal requirement for YouTube videos containing sponsored content.
- dumbfoundded 5y ago
  Yeah, that's part of the new regulations / guidelines by the FTC. If FB/Youtube/IG/TikTok have to enforce that, it would be probably be a complicated and difficult system to build. This would increase the barriers to start a social network. This is part of the transition from innovation to regulatory capture. 10 years ago there weren't really any limits or regulatory clarifications and I expect to only see more.
danjac 5y ago
It's not really about "innovation", it's about fooling investors, customers and employees/gig workers for as long as possible until economic, technological or legal reality catches up with you. See: WeWork, Uber, etc.

DJBunnies 5y ago

Not all crypto currencies are the same. Ethereum has had lots of these hacks, due to bugs in the smart contracts provided. You don't see these types of (protocol level) hacks in bitcoin, litecoin, or monero.

dumbfoundded 5y ago
Ethereum actually offers interesting features and possibilities as well as being a currency. Bitcoin, litecoin and especially monero are only useful when you want to spend money in a way a government doesn't want you too.
- deleted 5y ago
  [deleted]
- DJBunnies 5y ago
  Solutions for problems that don't exist. While opening up a huge attack surface. Blockchains don't need to be turing complete, for reasons like the contents of this article.
twox2 5y ago
These aren't protocol level hacks. These hacks exploit logic flaws in the smart contracts.
- DJBunnies 5y ago
  Which are enforced by the protocol.
  - zionic 5y ago
    If an AWS hosted site gets SQL injected who is to blame?
    - MonkeyClub 5y ago
      Russia? /s

hevalon 5y ago

I will only partially agree with you; mainly because indeed, that's what they're pitching crypto as - To be your own bank. But practically, most blockchains are replacing the inter-banking networks (like SWIFT) rather than the banks themselves, as you still need centralised entrypoints. To save some comments; Yes, they do have the potentials to create their own closed-circle economic ecosystems, but for the retail banking services to work (eg overdrafts, mortgages etc) you will end-up with centralised players as these kind of services need to be backed by wealth (it's not a tech-issue).

xur17 5y ago
2 of the biggest benefits I see are: - leveling the playing field with an open interface that anyone can build on top of - allowing true ownership of assets
- sbeller 5y ago
  > - allowing true ownership of assets What is ownership and how is it true? This is philosophically on the deep end, as the evil powers can seize your wallet just as easily and you may have no (legal) recourse, https://xkcd.com/538/ https://xkcd.com/538/ Seriously if I own a traditional asset within the current legal system (e.g. stocks, bonds, real estate), "the system" can help me protect and enforce my ownership rights, if you're in good social standing. In crypto "the system" cannot help you as much. However if you are in bad social standing, the system can seize the wallet or the stocks easily.
nicholasbraker 5y ago
Actually they are still blockchains in their own ecosystem. The only one who bridges blockchains between old and new ledgers is Quant including replacing SWIFT.

cfield 5y ago

Indeed. The uncertainty inherent in the universe we understand today and in all human endeavors is difficult to contend with in code. In the main, contracts serve to reduce uncertainty and to attempt to manage uncertainty that can't or shouldn't be reduced. Of necessity, contract law has developed a myriad of principles and rules in service of this aim. However, these principles and rules are themselves predominantly characterized by uncertainty. See, for example, the implied covenant of good faith and fair dealing.[0] Humility — and a corollary respect for our ancestors — is a defining characteristic of my own study of the law. --- [0] https://en.wikipedia.org/wiki/Good_faith_(law) https://en.wikipedia.org/wiki/Good_faith_(law)

71a54xd 5y ago

More calls for crypto regulation in 3..2..1..

DennisP 5y ago

As if thefts never occur in legacy banking. Here's a SWIFT network hack that successfully stole $81 million from the central bank of Bangladesh: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery At a lower level, mortgage wire fraud is a serious problem in real estate closings, and once it happens it's very difficult to get your money back: https://www.rocketmortgage.com/learn/mortgage-wire-fraud https://www.rocketmortgage.com/learn/mortgage-wire-fraud

tyingq 5y ago
81 million out of ~950 million attempted, then 18 of the 81 later recovered. So it was originally about the same scale as this one.

arcticbull 5y ago

Crypto is what the real markets would look like if the SEC gave everyone the decade off, and it's the worst. There's a reason we have an SEC. 1929 all over again. Regulation S needs to be extended to all crypto trading. [1] [1] https://www.dorsey.com/~/media/files/newsresources/publications/2005/03/summary-of-sec-regulation-s/files/tbls21publicationspdfupload1411007summaryofsecre__/fileattachment/summary_of_sec_regulation_s.pdf https://www.dorsey.com/~/media/files/newsresources/publicati...

DSingularity 5y ago
Why this one in particular?
- arcticbull 5y ago
  Doesn't permit Americans from trading securities overseas outside the watchful gaze of the SEC. IMO that's where the bulk of the insanity and manipulation happens.
- arcticbull 5y ago
  I misspoke a little bit, but to clarify: the regulatory regime in the US requires that US persons only trade US equities at SEC regulated brokerages. As such, broadly speaking, Americans cannot open brokerage accounts in foreign countries. Regulation S offers an exemption to this blanket rule, saying they're trading exclusively offshore in some circumstances that's ok too. What I'm advocating is that all crypto trading by US persons be at SEC/CFTC/etc regulated exchanges. Offshore appears to be where the chaos happens, see: Binance.
  - jcrites 5y ago
    Not all cryptocurrencies are securities. They don't all fall within the purview of the SEC. Bitcoin is not is a security. Neither is Etherium. I'm not an expert on this area but I don't believe the SEC has the power to regulate them, unless they stray into naughty territory. New Initial Coin Offerings are something that it can evaluate and deem a security, requiring proper SEC listing as a security; but the existing established digital currencies are not securities and do not require trading through brokers just like trading cash (or exchanging one currency for another) does not require brokers. The SEC hasn't declared them currencies but neither are they securities. They are assets that you can trade with anyone. That's my best understanding of the SEC's current stance. Future ICOs could also being avoid classified as securities if the avoided matching the rules that the SEC uses to evaluate whether an offering is a security. There's a checklist of criteria, including whether the asset is being advertised as something that people can buy and expect to make money on. Ethereum launched as a network where you could perform functional operations more complex than Bitcoin, and was a bit before the SEC got its evaluation rules together (from what I understand), and so may have slipped under the radar; but it certainly wasn't a pump-and-dump scheme like many other ICOs have been.

tyingq 5y ago

Somewhat similar to how an Uber now costs what a cab did since they are no longer subsidizing the ride cost. And also now seems to have similarly low margins. But, it did greatly improve the quality and availability of the service. Maybe crypto helps push banks the same direction.

breput 5y ago

The amount of regulation that any particular industry has is institutional knowledge about all of the failures and shady practices that have previously occurred and would otherwise be forgotten: * Banks * Finance * Insurance * Building and fire codes * Pharma * Travel (airlines, trucks, and cars) * Energy

tac0_ 5y ago

This is a very closed minded view. You're basically saying that every inefficiency in the current financial system is justified and we shouldn't try and change them?

dwb 5y ago
Of course we should, but the solution is primarily politics, not technology.

renewiltord 5y ago

Meanwhile, Citibank goes around showing you why these rules can still leave you a sucker.

1vuio0pswjnm7 5y ago

It is amazing to me how dilgently people who criticise cryptocurrency are attacked when they comment about it online. I think cryptocurrency is a story of how easily the work of idealistic software authors is co-opted to support the motives of people with more selfish intentions. One could argue its a microcosm of the problems with the internet and so-called "tech industry" as a whole.

robertwt7 5y ago

Not only tearing down, but it also introduce a new system as an exchange. That is innovation. There will be cons and challenges, but those will evolve crypto even further